4 REASONS YOU SHOULD AVOID AGGRESSIVE CRYPTO MARKETERS WHO SELL UNKNOWN TOKENS



Crypto tokens are transferable assets or utilities made over an initial coin offering (ICO) usually found on blockchains. ICOs usually involve crowdfunding to support project development. The tokens can be utility tokens (most popular), credit tokens (more like loans), combo tokens (dual function) and equity tokens.

As much as tokens can be very useful, not every token is as safe as it might seem. Many Crypto token marketers are usually insistent and offer massive returns, especially on some “new” and unknown tokens. It is, however, important to avoid tokens without much information and recommendation of known experts on their performance and outlook.

Here are some reasons to avoid marketers parading unknown tokens:

1. Transparency Issues And Fund Theft

In 2018 alone, over 31 million Euros was stolen from investors by these desperate token marketers, many of which have been seen to have exhibited transparency concerns. Majority of these unscrupulous marketers were mostly domiciled in Georgia, China and Russia.

Also, some tokens are usually promoted with so much hype just to create a buzz that creates an artificial price hike. This artificial hike enables developers to quickly dump all their tokens and make a tidy profit before taking off - without plans of developing the project any further, after the token value plummets, thereby, leaving the investors with next to nothing.

2. False Referral Schemes and Ambiguous Business Models

Many of these marketers make use of referral schemes to promote these unknown tokens. Several multi-level Marketing (MLM) schemes have been proven to be scams over the years; as the structure simply involves robbing Peter to pay Paul, which is not a sustainable business model.

These offers are usually covered in a lot of ambiguity, with promises of higher returns for referring more investors to purchase such tokens. Investors must also be on the lookout for ‘no risk’ claims, exaggerated returns and upselling. These are red flags that should never be ignored by any investor when considering any token.

3. No Legal Payback Obligations

It should be known that these strong promoters of unknown tokens have no experience with building working projects and are just unrepentant about selling tokens to the public. They have no personal investments in these projects and have no legal obligations to compensate investors if the developers do not fulfill their part of the contract.

It is thus important for every prospective investor to conduct in-depth research on every token being introduced to him by examining the ICO whitepaper, the background of the developers and the intentions of the project. It is also important to look out for the listing of these tokens by renowned exchanges, to ensure their long-term viability.

4. Outrageous Profitability Claims

This is one of the key things to look out for and why you must avoid aggressive crypto marketers. In most other businesses, outrageous claims on returns raise a red flag; this is also applicable in the cryptosphere. These marketers would capitalize on the surge in the price of the Bitcoin (BTC) to deceive unsuspecting potential investors. In most cases, the Investment being promoted is in no way related to Bitcoin.

Catchy marketing phrases such as “once in a lifetime purchase, and see how much you could have earned,” are some of the tools often utilized by these marketers. They compare their stocks to those of established and well-performing companies whose stocks excelled in the past. They never get to say a word about crypto investment associated risks, all they promote is Returns! Returns!! Returns!!!

Conclusion

Every industry has its fair share of fakes and fabulous fakes. You have a personal duty to flee from schemes that always look too good to be true.!

Read Also:

If You Live In America, These Are The 4 Best Crypto Exchanges You Must Know





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